While I haven’t seen nearly as many pitch decks as most VCs or Angel Investors, I have seen probably close to 100 by now, and it feels like we made close to 100 ourselves when we were raising our Seed round.
Last week I was talking to a friend who is getting ready to raise his Seed round and he asked me for a list of things he should avoid doing in his deck. After sharing a few things that came to mind he said, “you should share that on your blog!” So I’m doing that right now.
If you’re putting together a Seed deck, here are three simple mistakes to avoid:
- Showing a TAM that is unrealistically too large – this is #1 for a reason since it’s something that can make investors think you don’t really understand how big your actual addressable market is. I’ve seen TAM numbers in the 100 billion range, which is crazy. Know that every investor has heard the same pitch of, “our market is X Billion, imagine if we just got 1% of that.” The reality is, you should really be showing TAM, SAM, and SOM to clearly illustrate how big your market is. If you don’t know what SAM and SOM are, read this.
- Creating projections that show rapid hockey-stick growth – some people might argue with me on this one but I prefer to see realistic projections if you’re going to have projections in your deck. While it would be great to go from $0 to $100k MRR in your first six months, that’s probably not going to happen. It’s a lot more powerful IMO to show that you know your unit economics but either hold off on projections, or if you do many projections, make them grounded in reality vs. setup just to show an investor how you’re going to be the next unicorn.
- Being untruthful about anything – this is a great point that Joe Floyd brought up in my interview with him. If you lie in your pitch deck, sure it could get you another meeting, but once an investor goes into diligence, they’re going to find out that you lied and that’s pretty much going to be the end of that conversation. It’s never a good idea to start any relationship with a lie, so don’t do it with an investor that you want to have on your side through thick and thin.